Home / World Business
Tue, Mar 01, 2005 - Page 12 News List

US cash boosts China reactor bid

MASSIVE PACKAGE Flush with financial backing from Washington, Westinghouse Electric Corp is aiming at building nuclear reactors in the power-starved country


The Westinghouse Electric Corp was to present a bid to China yesterday for building four huge nuclear reactors, backed by a pledge of nearly US$5 billion in financial assistance from the US government that it hopes will give the company an edge over competitors from France, Germany and other nations.

But the package of loans and loan guarantees does not follow the typical pattern of the government's Export-Import (Ex-Im) Bank, and is raising objections from some critics.

Approved on a preliminary basis by the bank on Feb. 18, the package is almost three times larger than anything the bank has offered before. And while it would stimulate employment in the US, the price would amount to about US$1 million a job. The package also appears to benefit the British government, which owns Westinghouse through BNFL, the company formerly known as British Nuclear Fuels.

"If the risk were not falling on the Ex-Im bank, it would be falling on the British government," said Peter Bradford, a member of the Nuclear Regulatory Commission from 1977 to 1982.

Bradford said he opposed the subsidy to a foreign company, and what he called support by the commission for Westinghouse's sales efforts.

"Jobs really aren't what this is about. What it's about is protecting the investors in the company making the bid, and here, there is only one investor," he said.

Democratic Representative Dennis Kucinich, who is a frequent critic of the bank, said, "The bank is funded by US tax dollars; they should be supporting US companies. I'm not against US jobs, but shouldn't we be for US companies?"

Kucinich said that the deal could also eventually hurt the export of technology from this country because China has said that it wants to build many more plants and take over the manufacture of the components, many of which are now made in the US.

A spokesman for the bank, Phil Cogan, said the aid package had "nothing to do with shareholders." The package, which would go to the bank for final approval if Westinghouse won the bidding, "is for the Westinghouse Electric Company of Monroeville" in Pennsylvania, he said.

Ownership of the company "makes absolutely no difference," he said.

BNFL bought Westinghouse's nuclear unit from broadcasting company CBS in 1998.

The British government has intermittently discussed selling BNFL and its Westinghouse subsidiary and recently reorganized the company. To make itself more attractive, the company recently separated some of its unprofitable ventures, including liabilities related to a subsidiary that recovered plutonium from spent nuclear fuel for reuse.

Westinghouse spokesman Vaughn Gilbert, said that the proposal to build the Chinese reactors represented about 5,000 jobs in the US because components like the instrumentation and control systems would be manufactured here. The reactor vessel and the steam generators, the largest parts, would come from other countries.

Westinghouse would also supply the fuel, at least initially. China has expressed interest in building dozens more reactors and sticking to a standard design, so winning this contract could mean many years of business, although fewer parts would be imported as time went on. Bidders are hoping for a decision from China by the end of the year.

Cogan, the Ex-Im spokesman, said that the bank was backing only the portion of the contract that would involve work in the US. According to Westinghouse, the American portion of the deal is half the reactors' value, suggesting that the four reactors would cost US$10 billion, but the company would not disclose the amount of its bid.

This story has been viewed 4134 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top